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Building the economy we could have: Community Wealth Building

This instalment of ‘Building the economy we could have’ explores Community Wealth Building and how this approach can bring health and social benefits while building resilient communities to better weather turbulent times. 

A decade ago, one in twenty Australians rated their life satisfaction as very low. Today it’s one in ten: nearly 2.2 million people now living below what statisticians call the “wellbeing poverty line. It happened while the economy, by its official scorecard, kept growing. But growing for who? 

It’s clear Australians want healthy and thriving local economies that work for people and our environment, not profit alone and a different approach is needed to make sure wealth is shared and kept locally.  

It’s in this environment that the economic development strategy of Community Wealth Building has started attracting increasing interest. But what is it? And what can it offer us here in Australia?  

What is Community Wealth Building? 

Community Wealth Building is an alternative to the trickle-down assumptions of a growth-first model of economic development. It puts people at the centre of the decisions made, with a focus on predistribution of wealth, ownership and resources, making sure it is designed from the start to genuinely work for people and provide long-term, lasting changes in the economy, addressing the root causes of inequality and poverty (See Predistribution). 

There are five main pillars that guide Community Wealth Building:  

  • Progressive procurement of goods and services 💸 (Spending): Using anchor institutions, such as local government and big employers like hospitals, universities and other public institutions, to harness their procurement to bolster local supply chains and support local business development, spending, and investment. 
  • Fair employment and just labour markets 👷‍♀️(Workforce): Using these same anchor institutions and worker-owned cooperatives to ensure employment practices and wages are fair, pay a living wage and create more opportunities for equitable and local economic participation and control over work. 
  • Socially productive use of land and property 🏡(Land and property): Public land and property assets are used to create shared wealth for people, bringing local land and development under community control. 
  • Making financial power work for local places 🏦 (Finance): Wealth and savings are harnessed and reinvested for the local community using public and community banks and credit unions as well as targeting superannuation investments. 
  • Plural ownership of the economy ♻️ (Inclusive ownership): The promotion of different business ownership models to build wealth for local communities, such as cooperatives, social enterprises, public ownership.  

History 

Community Wealth Building emerged as an economic development model in 2005, through the work of The Democracy Collaborative, who describe themselves as an ‘Action-oriented Think-Do Tank’ in Cleveland, USA and in the work of The Centre for Local Economic Strategies (CLES) in the UK.  

Community Wealth Building came about from the desire to create economic democracy and a path forward that built fairness into the model of our economic system, inspired by the Civil Rights movement and the New Deal in the US as well as successful worker cooperatives such as Mondragon Corporation in Spain. 

The Cleveland and Preston models 

In 2008, Evergreen Cooperatives was set up to bring Community Wealth Building from concept to reality in Cleveland, with Evergreen’s founders and local ‘anchor institutions’ helping to set up worker-owned cooperatives with the aim of creating high-quality jobs, making neighbourhoods vibrant and sharing economic ownership with the community.  

Evergreen acquired small and mid-sized businesses, converting them to employee ownership, creating living wage jobs, training new employee owners and then providing ongoing business support to the worker cooperative. Evergreen Coops now include a commercial laundry, insulation services and a coffee roastery and cafes. 

Across the Atlantic in the north of England, following the Global Financial Crisis of 2007/2008, Preston Council was facing severe cuts to the budget after the loss of over a billion pounds in government grants. The business-as-usual approach would have been to slash council services and supports, pushing more people into poverty and economic disadvantage without doing anything to support people to have employment and options for good quality jobs.  

However, a Preston City Council representative attended an event in London with The Democracy Collaborative and one of their co-founders, Ted Howard. Ted was then invited to Preston to discuss Community Wealth Building, and from there, Preston worked to implement the pillars of Community Wealth Building via local anchor institutions.  

In 2025, they celebrated ten years of the ‘Preston Model’, with outcomes that clearly demonstrated how aligning the economy with local need can be a mechanism to deal with other problems such as mental health, life satisfaction and wages. 

In fact, The Lancet, the world-renowned medical journal, studied the model and found a reduced prevalence of depression, lowered antidepressant prescriptions, and improved life satisfaction. Plus, it raised the median wage 11 percent!   

Preston proves something that most of us would have an idea about already: that a thriving local economy that keeps wealth flowing in the community provides economic improvements as well as health and wider societal benefits.  

It also proves that an approach to mental health without addressing some of the root causes, such as economic insecurity and poverty, will simply be treating the symptoms, allowing the problems to continue (See Lifestyle Drift, The Economy We Could Have, Upstream Briefing) 

Scotland brings the idea to life across a whole country 

Scotland has recently passed a groundbreaking piece of legislation that introduces the benefits of Community Wealth Building across an entire country. The Community Wealth Building Act requires Ministers to publish a Community Wealth Building statement setting out the measures they intend to take to implement the pillars. Across Scotland, local authorities (local governments) will work with relevant public bodies to create and implement action plans for their area.  

Neil McInroy, a leading expert working with CLES and The Democracy Collective who has also been an advisor to the Scottish Government on Community Wealth Building, states that the power of this is that it moves Community Wealth Building from something that is optional or opt-in, to something that is system-wide. 

What is the potential for Australia? 

Many regions in Australia are starting to ask how they can look at economic development differently, including those in which we have worked such as Hay in NSW and south west Queensland. The economic blueprint we worked on with the South West Queensland Regional Organisation of Councils, includes a possible first Community Wealth Building step: meeting with key anchor institutions in Roma to identify spending or contracts they could commit to prioritising local suppliers or First Nations organisations. 

In Geelong, Annie Smits and Bill Mithen from Neighbourhood Economics are working to bring the concept to life in a place hit hard by previous waves of economic change where resources left. Norlane and Corio, two suburbs of Geelong, were once home to the Ford factory and auto industry, and today are two of the most disadvantaged communities in Australia.  

Neighbourhood Economics joined with SGS Economics & Planning to launch a suite of new reports in May this year, including Community Wealth Building: What will it take? This report explores what’s standing in the way of adopting Community Wealth Building as a model of local economic development in Australia. 

Other Australian Community Wealth Building activity includes: 

  • The City of Sydney, which released a discussion paper at the end of 2021 as a first step in the policy development process 
  • SGS Economics & Planning prepared a working paper on how Community Wealth Building could benefit Melbourne’s eastern region or the Victorian Government and the Eastern Region Group of Councils in 2024. 

Our next instalment in this series will be an interview with Bill and Annie from Neighbourhood Economics on their work in Geelong and what is needed to bring Community Wealth Building to life in Australia.  

Check out our series, ‘Building the economy we could have’ for more. 

Steady but cautious progress on just transitions at Bonn

Negotiations continued to shape the global approach to just transition ahead of COP31 at the recent Bonn climate talks, attended by The Next Economy’s founder Amanda Cahill.

Amanda’s time on the ground working closely with negotiators, country delegations, and civil society groups offers a timely window into both the progress being made, and the challenges that remain, in turning the Just Transition agenda into something tangible and actionable.

“There’s been steady, if cautious, progress on the proposed Just Transition Mechanism, which is a body proposed to support nations to manage the transition to net zero,” says Amanda. “It’s still on track to be further developed and potentially operationalised later this year, but there’s clearly more work needed to build a shared understanding of what it should deliver in practice.”

Alignment was a priority moving forward, she added: “Countries are supportive in principle, but there isn’t yet a clear, common view of what a ‘mechanism’ actually looks like or how it functions.

“A big part of the conversation now must move from broad commitments to something that is structured, resourced and implementable, for regions around the world who are already navigating the transition and dealing with the impacts of change.”

There was a packed agenda at Bonn, with discussions focussed on mitigation, adaptation, trade rules, and finance to support climate action. In particular, there was significant interest and debate about how the Transitioning Away from Fossil Fuel agenda spearheaded by Colombia, The Netherlands and Brazil could be integrated into the COP agenda. 

“Being on the ground highlighted how important coordination is across governments, business, unions, research institutions, and a wide range of civil society groups, including Indigenous and youth representatives. So much is happening around the world and yet for this to be effective, efforts need to be better connected and resourced.”

“There is a lot of work to do before COP31 is held in Türkiye, with success highly dependent on how well parties can translate ambition into a clear framework with defined purpose, governance, and support behind it.”

Earlier this year, The Next Economy made a submission on how a Just Transition Mechanism could be operationalised to the United Arab Emirates Just Transition Work Programme. 

Read our summary of the submission to find out more about what a Just Transition Mechanism is, why it’s needed and how we think it can be made a reality.

Building the economy we could have: Nightingale Housing

To build the economy we could have in Australia, changes must be made to the housing market as access to and ownership of housing is a huge driver of inequality. Currently the way the housing system operates seems to be a far cry from one designed to provide housing that is socially and environmentally friendly, at affordable or accessible prices. Instead, Australia has become a place where ‘investors’ look to make a profit. 

Melbourne’s Nightingale Housing offers a different model. As a not-for-profit, Nightingale doesn’t add a profit margin, delivering homes ‘at cost’.  Apartments are sold not to investors, but to residents and housing providers, and caps are set on resale prices. One-fifth of apartments are prioritised for key workers, people with disabilities, First Nations people, and single women. 

They also have a focus on minimising resource use and building strong community ties. Social connection is fostered via shared spaces, such as rooftop gardens, BBQs, and laundries. Recycled, natural, and local materials are used where possible, with energy-efficient features, like double glazing and insulation. Rooftop solar and water harvesting support the gardens, while the complex includes bike parking and are deliberately based near public transport to avoid the need for a car.

Our Economic Change Project Officer Josie toured one of the Nightingale apartments in Brunswick, then sat down with Toby Dean, the Head of Community at Nightingale Housing.  

Toby works to ensure there are foundations for friendly relationships with existing and future residents. He also focuses on engagement with Community Housing Providers to help more people access to quality and secure housing. The conversation covered what Nightingale does and changes we need in the housing market in Australia to build the economy we could have.

Our Economic Change officer Josie, touring Nightingale
The interior of a 2 bedroom apartment
Integration is a priority, with plants and trees planted and cafes and retail.

Can you tell me a little bit about who Nightingale is and what you are trying to do? 

We’re a developer, essentially, so we operate in a system that’s primarily driven by profit, but we’re a registered charity and a not-for-profit. We buy blocks of land and build housing that puts community and environment first. 

What are some of the ways that you put community and environment first? 

At the core of our project, we typically sell to owner occupiers, we sell at cost, and we sell a portion of our building to community housing providers to have affordable housing mixed into the building. We care about everyone that’s living in the community, and we hope it’s a mix. We typically build small footprint homes, which is one of the first steps to a more sustainable living system, to have smaller homes and more efficient homes as well, with things like solar panels, 100% green power, and well insulated. 

 What are the sorts of ways that Nightingale aims to create more of a connection between neighbours? 

In a typical Nightingale apartment building, there are studios, and one-, two-, or three-bedroom apartments, and then on top of that, there are shared spaces that are designed to have both a practical function and a community driven function. So, bike parking, laundries, sometimes a guest house, a bath house, and rooftop garden spaces. All those areas are designed for people to do their washing or to garden, but also to get to know their neighbours and share resources as well. 

Bathhouse that can be booked by residents
Communal bike parking
Shared play area for children

Where are the Nightingale projects? There are lots around Brunswick in Melbourne, but where else? 

We have a rental project in Sydney, projects in Fremantle, Adelaide, Ballarat, Melbourne. Our next few projects are local, one in Preston [Melbourne]. We’re also continuing to do some townhouse projects in Alphington and other suburbs. We hope to do another project in Adelaide, and then it’s uncertain what will happen after that. 

We are Melbourne-focused but hope to expand that out, not only to capital cities, but typically we target areas that have good transport infrastructure, so that people can live without a car, like Wollongong or Newcastle. We aim to build close to public transport, close to amenities, and close to things like schools and education and jobs and infrastructure as well. 

What are the things that are core to Nightingale?

We always use 100% green power, we prioritise shared spaces, good internet, sustainable buildings. And then on car parking; we just don’t believe we’re in a car parking crisis, we’re in a housing crisis, and for us to build homes and then add a private car park onto it, it adds a considerable cost. For us, we think the biggest barrier is getting people into home ownership. 

What do you think is the hardest thing about being a developer in the housing market that we have in Australia? What are the barriers that Nightingale faces? 

I think it’s always tricky to challenge the status quo. Typically, development is a profit-driven industry, which we’re obviously kind of sitting outside of that. 

We want our buildings to perform well, and for it to be sustainable financially and environmentally, but it is tricky. There’s limited access to concessional finance in Australia, and there are a lot of barriers that can make development tricky. And construction costs are expensive, land is expensive.  

Have things gotten easier or harder since you’ve started in 2013? 

I think it’s probably been a mix. We’re still a small organization, there’s only five or six people that work here full time, and we’ve been through the ups and downs of the development industry. I think in some ways it’s got easier, people know who we are, people understand what we’re trying to do. There’s also been a big shift in planning laws that encourage medium-density or high-density developments and understand that not every home has to have a car. We’ve got past some of those battles. I think conversely, construction costs have increased so that it’s hard to build homes that people can afford to buy. You can build luxury apartments, but to build apartments at cost, typically for first home buyers, it’s gotten expensive.  

Absolutely, and when you’re in inner city suburbs as well, where the median house price is high, “affordable” for the area, might not be affordable for a lot of people. 

Yes. And “affordable” is a tough metric. There are proper definitions of it, but I think it’s more important for a home to be affordable on a person’s income rather than relative to market, which is what some people use. 

Diverse spaces built in like art studios and a meditation centre
Grassy rooftop area for sitting
Veggie gardens on the roof and BBQ space

Do you see the not-for-profit developer space getting better in Australia, or do you see a lot of examples of ‘ethical washing’?  

I think it’s gone both ways. There has been a shift to appreciate good development, and to appreciate good density, with the rise of kind of the YIMBY movement, and the changes to planning laws, and everything like that, which encourage development. I think, conversely, there’s still a lot of poor development, or density that’s not appropriate for the place. I think the general population now have greater expectation around sustainability requirements, about insulation, about acoustics, and comfort, and non-flammable cladding. 

What else has changed for the better since you first started out? 

The building codes have changed for the better, the energy requirements have changed for better. I think in general, we’re moving in a better direction, I just wish people would be more concerned about sustainability, affordability, and making respectful places to live where people enjoy living there. I also live in a Nightingale project, you get to know your neighbours, you feel cared for, and there’s a sense of connection that is important. 

What do you think about the situation in general in housing in Australia?  

I think it’s about acknowledging that it is tough for a lot of people; for renters, for first home buyers, even for those downsizing. I think that a lot of Australians are kind of wary or cautious of change, but I think it’s important to acknowledge that you can make changes in the housing system. Nightingale still finds it difficult, we’re not just cruising through as an organisation, things aren’t easy. I wish we had greater access to concessional finance and there were more not-for-profit developers operating in our space, so we weren’t one of the few.  

What do you see needing to change from a government approach? 

People talk about housing affordability, I think that’s a good term, but it’s relatively abstract for a lot of people. I think that housing in Australia is too expensive, and the cost of housing needs to decrease, or our wages need to increase. I think that the recent changes by the federal government were supportive.  

The changes to capital gains tax, and other changes that they’re bringing forward, I think are positive. I think that they will see housing perhaps get closer to wage growth, not increase as exponentially as it has, and for property not to be seen or viewed as a tool for wealth creation. We always wish for more, but I’m super appreciative of those changes. I think it was brave to do some potentially not popular decisions.  

I think there needs to be a strengthening of tenancy laws, for renters and anyone out there in the housing market, and I think there should be support for first home buyers. I also wish there was an increase in public and community housing funding. 

Thanks for your time, Toby. And thanks for showing me around! 

 Thanks for coming. It’s nice to share with people what we do here at Nightingale Housing! 

Head to www.nightingalehousing.org for more information.

Check out our series, ‘Building the economy we could have’ for more case studies, explainers and interviews that show what is possible in Australia.

Internal garden for cooling and greenery
Rooftop garden to allow access to greenspace
Internal garden for cooling and greenery

Why local governments are vital to Australia’s economic future 

As the ALGA National General Assembly wraps up in Canberra this Thursday, more than 1,000 local government leaders are heading home with a clearer sense of the scale of what is being asked of their communities and their councils, and what support they need to get the job done.  

It is a timely moment to reflect on the critical role local governments play not just in delivering services, but in shaping the economic transitions that will define regional Australia and our macro-economy for decades to come… 

Regional local governments are central to Australia’s economic transition and critical to ensuring change benefits their communities. Strengthening their capacity to plan, collaborate and create new opportunities will support transformational change in their regions for generations. 

Councils do far more than deliver infrastructure and essential services. Across Australia, local governments: 

  • Underpin local economies and community wellbeing 
  • Bring people together and advocate for their communities 
  • Support local development and represent community interests  

They also remain on the frontline of compounding pressures. Alongside communities, households and businesses they are feeling the impact of a range of moving pressures including but not limited to:  

  • More frequent extreme weather events 
  • Housing pressures and global market volatility 
  • National industry transitions and economic disruption 

Local government is often left acting as a ‘service provider of last resort’ ALGA noted in their Adapting Together Report in 2025, absorbing the consequences of forces largely outside their control. 

We hear from councils that the ask keeps growing, but the tools and resources haven’t kept pace. Outdated funding models and legislative frameworks mean councils are expected to do more with less, requiring new capabilities to: 

  • Manage change and reduce risks to services 
  • Respond early to forces shaping local growth and productivity 
  • Build resilience across their communities  

“Supporting locally designed solutions to complex problems is increasingly vital,” says The Next Economy’s Jacqui Bell. 

“While small rural local governments do not control all factors, they play a key role alongside other governments, community organisations, volunteers and local businesses in shaping a strong, sustainable future. 

“There is an imperative for local governments to continue to evolve into capable, collaborative and future-ready institutions. This means moving beyond traditional service delivery to deeper partnership with residents, businesses and institutions.  

“It also looks like developing strategic foresight capabilities, fostering innovation, making decisions based in evidence, acting early to mitigate and minimise impacts to services. Also, doing economic development differently in ways that build local wealth as well as respond to trends and pressures that impact growth, markets and productivity across the local economy. 

“Continued advocacy, attracting aligned investment and partnerships, and using policy and regulation to support a resilient, low-emissions economy will also be critical, alongside clear mandates and as we’ve seen today with ALGA’s emergency motion – adequate funding from state and national governments.” 

There are many examples of the wide ranging and evolving roles and needs of councils across Australia – all are leading on regional collaboration, engaging with business and community early, undertaking climate resilience planning and co-designing place-based solutions.  

“All of these show that local government can be both a stabilising force and a catalyst for transformation,” Jacqui notes.  

A few recent examples from the work The Next Economy has engaged with include:

 
South West Queensland launches economic blueprint for future 

South West Queensland is thinking differently about future opportunities and how the region participates in a future economy, launching a Future Economy Strategy. 

What if economic development starts with the wrong question? 

TNE program director Jacqui Bell joined economic development practitioners from across NSW to explore what a wellbeing economy looks like in practice, and what the Hay community’s approach to transition can teach the rest of us. 

Community insights for Uralla Shire’s energy future 

Working with Uralla Shire Council, The Next Economy engaged more than 150 residents to understand what matters most to them as large-scale renewable energy development takes shape in NSW’s New England region. The insights paper sets priorities for housing, services, jobs and nature to ensure fair outcomes as change accelerates. 

Building the economy we could have: Beyond ‘Lifestyle Drift’  

Overview:  

  • Too much focus on individual action and change puts responsibility for change at the feet of individuals, as if they were separate and not touched by the wider dynamics wrought by policy and economic dynamics. 
  • In public health this is called ‘lifestyle drift’.  
  • This lets the economy – and those who shape it – off the hook, while individuals bear the brunt of wider economic trends.  
  • Rather than blaming individuals for ‘wilting’ when the conditions around them don’t enable them to thrive, it is those economic trends are where change is most urgent: including decent work; businesses that harness profitability is a means, rather than a goal in its own right; and economic activity generated from the local up via community wealth building. 

The economy is a major upstream cause of many of the problems Australians face downstream. The economy creates the causes that compel certain behaviours, invoke certain reactions, and deliver harmful impacts.  

Yet often the emphasis of policies and programs is choices and changes individuals needs to make. In the public health sphere, this shift in emphasis from the wider context to individual lifestyle choices has been referred to as ‘lifestyle drift’. Here Dr Katherine Trebeck shares her thoughts on the need to move beyond it. 

What lifestyle drift means 

Firstly, let’s look at what lifestyle drift actually means. It’s a term used by public health scholars and, as you may have suspected, it’s not as fun as it might sound. It’s what happens when those designing policies might understand the external conditions (upstream factors) that drive health inequalities, such as the quality of work and access to decent housing. However, when it comes to action, the focus drifts downstream to questions of lifestyle, where the individual is in the frame, rather than the economy.  

Another way to think about the problem with such an approach is ‘wilting-plant-syndrome’, a concept described by poet and clinical psychologist Dr Sanah Ahsan.

Ahsan wrote: ‘If a plant were wilting, we wouldn’t diagnose it with “wilting-plant-syndrome”; we would change its conditions’. 

‘Wilting-plant-syndrome’ is seen all too often in policy and economic thinking today, where downstream individual action is seen as the problem, not the wider conditions causing the problems. The consequence of the thinking inherent in both lifestyle drift and wilting-plant-syndrome is that the onus of action is placed on individuals, as if they were separate and not touched by the wider dynamics wrought by policy and economic systems. 

What lifestyle drift looks like 

Health is an area where it is hard to avoid seeing the lifestyle drift phenomenon play out.  

As Kriznnik et al say ‘the main assumptions underpinning interventions to address health inequalities … remain focussed on individual responsibility’. For example, when people are struggling with their mental health, they are offered therapy or antidepressants. This might help someone manage, but it won’t address the challenges they face in their lives such as poverty, a hostile workplace, the stress of being unable to pay bills, or the anxiety of precarious housing. You can see a focus on individual action in a recent briefing about tackling obesity, where the suggested changes mostly revolved around mechanisms that supported or compelled individuals to act differently. 

Lifestyle drift is also evident in a 2025 Australian Productivity Commission report calling for a National Prevention Investment Strategy. In all 95 pages of the report, the word “poverty” appeared only twice (once in a reference), and the word “inequality” only three times. To its credit, its list of primary prevention measures included economic support for families (while important, arguably transfers are also an after-the-fact response downstream). But in the same vein, it also described parenting education (where the onus is on the individual parents to change). 

We Aussies aren’t the only ones at risk of wilting plant syndrome and lifestyle drift:  

  • A few years ago, the World Health Organisation published a list of ‘best buy’ interventions on non-communicable disease, which positioned the individual as the unit where change needs to happen (through education, taxes on unhealthy food etc). Poverty was mentioned only in passing and inequality ostensibly ignored. 

These individualised framings cut through. For example, poor diets are often attributed to bad individual choices. Research found that in the UK Victorian-era notions of deserving and undeserving poor prevail, with the researcher observing that some providers of foodbanks depicted food charity as a ‘choice’, seeming to endorse ‘the classic deserving/undeserving divide while individualising food insecurity and obscuring the systemic issues’. 

Shifting the blame for environmental harm 

Shifting of responsibility to individuals, often by large corporations, is rife in environmental issues, from litter to the concept of a personal ‘carbon footprint’. For example: 

  • An ad launched in the US a few years ago showed an actor canoeing through polluted water, then walking toward a highway, only to see someone throwing rubbish out of their car window. The end of the ad states that ‘People start pollution. People can stop it’. This was part of the Keep America Beautiful campaign, an initiative designed and funded by packaging business, such as American Can Co, Owens-Illinois Glass Co, Coca-Cola and Dixie Cup.  

How lifestyle drift dodges the real issue 

The problem with all this focus on individuals is that overly emphasising individual action lets the real culprit off the hook: the economic system itself and the rules and players within it that create a misalignment with what people and planet need. It ignores the political decisions and deep-seated assumptions that have carved out the shape of the economy of today.  

As scholars writing in the Lancet conclude, individualised framing absolves corporations and government of blame. It serves to ‘effectively [neutralise] the effects of social context and airbrushes out of the picture a number of important contextual agents and institutions—specifically the state, markets and industry’. 

Well-known epidemiologist Professor Michael Marmot and colleagues warn that: 

an ‘individualistic approach to health … is a convenient mechanism for those in and with power, and wider society, to abrogate responsibility for creating the conditions for a healthy society’.  

Time to put the spotlight on the economy 

The reality is that it is the economy that drives many of the challenges Australia confronts today, from people’s sense of grievance and lack of hope for the future to species loss; from homelessness to increasingly chaotic weather. The economy is a major upstream cause of the many problems Australians face downstream. The economy creates the causes that compel certain behaviours, invoke certain reactions, and generate harmful impacts. 

Take the unhealthy behaviours, such as lack of exercise or reaching for processed food. Many are not so much a matter of free choice, but options taken when agency is bounded and curtailed. Sometimes people simply do not have the extent of autonomy and choice that the prevailing economic discourse, with its emphasis on individuals maximising their own self-interest, might imply.  

‘Causes of the causes’ is how Professor Michael Marmot describes the social pressures that drive harmful behaviours: such as reduced physical activity due to safety concerns, or stress leading to smoking or overeating.  

A leading authority on the social and economic determinants of health, Professor Sharon Friel, documents the various evidence of how and to what extent the economy matters to health. Socio-economic inequalities are critical factors: it was recently reported by health scholars Dr Sarah Hill and Dr Edward Jegasothy that one-fifth of ill-health in Australia could be avoided if everyone had the same socio-economic conditions as the top 20 per cent. 

So, where to from here? 

The story that needs to be told is how many economic policies are deepening inequality, and how deliberate policy choices – like tax concessions for the wealthy, weakened unions, and the emergence of precarious work – have shifted wealth upward and eroded protection for workers, while increasing insecurity and instability for many.  

When policy and decision makers are discussing outcomes, they need to take account of how market logic and profit motives have reshaped access to basic needs in areas such as housing, education, and often health and care provision. This transfers risk from institutions to individuals and undermines collective support, and spurs an understandable response: people turning to personal insurance for support when sick and to their homes and share markets to provide a decent livelihood in their old age. 

Conclusion: what would be better? 

‘An indigenous analysis of the same thing would look more at the context to try and find out what actually happened’ – Tyson Yunkaporta, Indigenous scholar 

The alternative to lifestyle drift and wilting plant syndrome is looking upstream to how the economy operates: the terrain of jobs, what sort of work is paid for, ownership of firms, costs of goods and services, and provision of core services. Instead of just instructing and coaxing individuals to change, it means turning to the realm of the economy as a critical arena for prevention. It is the economy where risks such as poverty, precarious work, and homelessness, can be truly addressed, as opposed to simply patched up. 

The economy we could have means implementing policy instruments that ensure, for example:  

  • People are paid enough, have job security and conditions that support a healthy life 
  • Profitability is a means, rather than a goal in its own right  
  • Economic activity is generated from the local up via community wealth building, rather than hoping in vain for it to trickle down  
  • Basic needs such as food, shelter, education, and health care are affordable 
  • Sources of unearned wealth, such as inheritance and rent and land values, are taxed more than income 
  • Economic activities which make money from people’s struggles or profit as a result of doing harm to the planet are, if not banned, at least minimised  
  • Prices of goods and services reflect their true cost in terms of what it took to make them, both in environmental terms and via people involved being compensated for their efforts  
  • Success is measured in ways that reflect what people and planet need. 

The economy we could have means grappling with the purpose, design, and delivery of the economy and resisting lifestyle drift.  

Fortunately, there is no shortage of ideas and practices that show what is possible.  

Check out our series, ‘Building the economy we could have’ for more.

Announcing: Erinch Sahan’s Australian tour in partnership with The Next Economy

At The Next Economy, we are excited to team up with Erinch Sahan for his Australian tour to share ideas, provocations, and proof of what is possible in the world of business and investment.  

Businesses and investment matter in Australia. They have a significant role in shaping economic, ecological, and social outcomes – for good, and sometimes for ill. So how can business and investment ensure that their activities and ways of working contribute to an Australia that future generations will be proud of?  

Erinch is a globally renowned thought leader with expertise in business design and investment. Join us to hear from Erinch and widen the discussion about the critical role of business and investment in building the economy we could have.  

Who is Erinch Sahan? 

Growing up in Sydney in the 1980s and 1990s to Turkish immigrant parents, he began his professional life in the corporate sector, and from there, has increasingly focused on making businesses a positive force in the world.  

His experience is varied: he has been CEO of the World Fair Trade Organization, a senior associate at the Cambridge Institute for Sustainability Leadership, and recently the Business and Enterprise Lead at Doughnut Economics Action Lab. He is currently leading the investment portfolio at the UK’s Joseph Rowntree Foundation (JRF), driving its move to mission-related investing.   

TNE’s Economic Change Program Director, Dr Katherine Trebeck, has worked with Erinch over the years and is constantly inspired by his ability to question what business can do and how it needs to change to enhance its positive impact. She describes him as “not just one of the boldest thinkers in business design, but someone who shares incredible case studies and stories of innovative business leaders delivering tangible impact”.   

Find out more about Erinch: 

👂Listen to Erinch’s episode on the BBC’s Bottom Line – Decisions That Made Me: https://www.bbc.com/audio/play/p0l7c12y

👀 Watch Erinch’s latest TEDxPrague:

Get involved!  

These are the public facing events in the works. We will be updating this as we get closer to the dates so subscribe to our newsletter for updates, and follow our LinkedIn and Instagram so you don’t miss out!

Melbourne:  

Erinch Sahan, in conversation Regen Melbourne and Social Traders.

📅 Date: Tuesday 6th of October, early evening

📍 Location Greater Melbourne Foundation Hub

🌍 Hosted by: The Next Economy and Greater Melbourne Foundation

🎟 Tickets:  Event page and tickets coming early August!

Canberra:  

Redesigning business and finance to unlock economic transformations: Australian National University Saving the World Webinar.

📅 Date:  Thursday 8th of October, 12.30pm-1.30pm  

📍 Location: Online webinar

🎟 Tickets: Register here. 

Sydney: 

Erinch Sahan in conversation with the Paul Ramsay Foundation.

📅 Date:  Wednesday 14th of October, 6pm-8pm

📍 Location: Yirranma Place, Darlinghurst

🎟 Tickets: Coming in August!

This trip is generously supported by WWF, Paul Ramsay Foundation, and Greater Melbourne Foundation. 

If you would like to support this trip or find out more about events, please email j.foster@nexteconomy.com.au  

Building the economy we could have: Predistribution

To build the better economy we could have in Australia, we need to think differently. Dr Katherine Trebeck, economist and Economic Change lead, is a big fan of predistribution. Here she explains why. 

I often use a ‘jigsaw puzzle’ as a metaphor to explain the array of shifts in policy and practice needed to build an economy in service of people and planet. No single piece is sufficient on its own, but together, enough changes have potential to build towards to an economic system that gets things right for people and planet first time around. 

To grapple with this array of actions, it can help to loosely cluster the pieces into the four corners of that jigsaw puzzle: the ‘4Ps’ of purpose, prevention, predistribution, and people power. 

Here, I want to offer a few notes on the predistribution corner as it is so often missing from the conversation about the economy, with focus instead on taxation and how to better fund programs for those who are impacted by the inequalities built into our current system (‘compensating the losers’ as a report from a US think tank rather bluntly puts it). 

Australia used to do fairly well in terms of predistribution (that is, for white, able-bodied males). But no longer; we’ve become an ‘assetocracy’ where access to assets tends to be what shapes peoples’ life chances and life choices.

Credit: Jess Harwood, for The Next Economy

Predistribution is about pre-emption and prevention, and a critical element of upstream change that builds a better economy for all of us.  

‘It is not enough to…try to balance the inequalities generated in the market through retrospective tax and transfer. It is necessary to transform and democratise the institutional content of the market economy, rather than just compensate for its inequalities.’ – Gabriella Ramos et al 

Origin story 

The term predistribution was coined by the American scholar Jacob Hacker who describes it as ‘market reforms that encourage a more equal distribution of economic power and rewards even before government collects taxes or pays out benefits’.  

Predistribution’s political moment in the sun came in 2011 when Ed Miliband, then leader of the UK opposition Labour party, was in the audience for a speech that Hacker gave in Oslo. Miliband returned to the UK and – briefly – championed the idea. 

But predistribution is one of the most important ideas that should be high on the political agenda. Let’s look at why it matters, what it is, how it plays out in practice, and the implications for policy. 

What does predistribution mean? 

The essence of the idea of predistribution is ensuring that the market economy does more of the heavy lifting in delivering a more balanced divvying-up of resources. British scholar Martin O’Neill explains it as ‘the particular ways in which the economy can be shaped to disempower the privileged and to empower the disadvantaged’. Its focus is on market mechanisms that determine the distribution of wages, profits, and other flows and stocks of money.  

Government comes into the predistribution story via its role in creating and shaping markets so that the results are aligned with public goals: using rules, incentives and other levers to shape market outcomes. This includes boosting (or curtailing) the bargaining power of market players such as workers, employers, and wealth holders.  

Therefore, it differs from government using tax and benefits to shape the distribution of economic resources after market outcomes have emerged: this is redistribution.  

We’ll come to some specifics in a moment, but you could expect to see predistribution in the form of:  

  • Strong standards for workers (such as regulation, procurement, support for unions, and living wages). 
  • Regulation of the financial system and corporate governance; including provisions to stop harmful activities.  
  • Ensuring more people have a share of capital ownership, including owning businesses via worker or commubity cooperatives. 
  • Spending to bolster people’s opportunities and bargaining power in the labour market (think education and other public services: so they are not dependent on someone’s income) and groups like unions who can stand up for workers. 
  • Addressing how affordable certain goods and services are (for example, via price caps, subsidies, or direct provision): rather than only focusing on how much money is in people’s pockets; also being concerned with how far it stretches. 

Why it matters 

Inequality arises in and can be addressed via two realms. Firstly, what is sometimes called the ‘primary’ realm of work, wages and occupational pensions, and then in the secondary realm comprising taxes and benefits. Predistribution is about action in the primary realm. Here the wages that workers earn are the outcome of ‘a complex process of implicit and explicit bargaining between workers, employers, and (where they exist) unions’: the influence of each compared to the others matters, and is a function of various rules and regulations. 

This is of interest to anyone interested in economic inequality because this realm is where the bulk of the balance or imbalance of economic resources arises: the ‘biggest single factor in determining the distribution of market income is the relative shares going to wages on the one hand and to capital incomes (rent, interest, dividends, and capital gains) on the other’.  

In Australia, ‘capital gains arising from accumulated wealth have produced large increases in passive, unearned income that have added further to the wealth of the rich‘.  

Evidence from around the world bears this out too: in global terms, four fifths of inequality stems from what was going on prior to the government getting involved via tax and transfers, with only one fifth being the result of tax and transfers. The lower levels of inequality in Europe ‘cannot be explained by more equalizing tax and transfer systems… “Predistribution”, not “redistribution,” explains why Europe is less unequal than the United States’, according to Blanchet, Chancel and Gethin.  

So, there are a range of reasons which mean that predistribution is worth focusing when thinking about how to achieve a more balanced distribution of economic resources: 

  • Redistribution is not enough. As Hacker says, taxation and benefit payments ‘cannot do the work on their own’. 
  • Predistribution, in contrast, does not require government to spend substantial quantities of public money. Instead, in reducing inequality at source governments can generate fiscal savings by reducing the need for spending downstream (on benefits), thus freeing resources to spend elsewhere.  
  • There are a range of real politik reasons why redistribution is harder to pull off:  
  • Policies that are about spending (for example welfare payments) are challenging politically given concerns (reasonable or otherwise) about budget deficits and overall debt.  
  • Governments that do seek to be proactive on the redistribution front often face resistance and even backlash, as Hacker describes. He explains that the wealthiest have a tendency to complain – loudly – about increased taxes on their income and wealth.  
  • On the other hand, it is often easier to harness the ‘political space’ for action on predistribution measures than it is for taxing and benefits provision. 
  • Finally, although not noted by its original proponents, predistribution also matters because of the growing recognition that economic growth-based agendas are incompatible with keeping the world’s environment within planetary boundaries. Redistribution tends to rely on the economic growth: grow, tax, and spend back via welfare. So taking the science around the environmental limits to growth seriously compels consideration of mechanisms to ensure a good life for more people without having to rely on the grow and redistribute recipe. 

Implications for action  

Convinced that predistribution is worth getting behind? Superb. What might you want to think about encouraging – or, if you happen to work in the right place in government, actually implementing? 

Actions that policy makers need to be prepared to implement to promote predistribution include: 

  • Support for worker owned cooperatives (for example, via reduced taxes, simplified legislation, and education of ancillary services so they are more supportive of cooperatives). 
  • Legislation for worker rights and conditions (such as job security, being able to request flexible schedules and access to paid leave for family care). 
  • Regulations to strengthen the position of trade unions (what Hacker describes as a ‘countervailing power’) and corporate governance that puts workers on company boards. 
  • Enactment, and enforcement of minimum wages set at the level of living wages. 
  • Curbing extremes of high pay (for example, increased taxes when CEO to median pay exceeds a certain ratio). 
  • Broad based service provision that bolsters people’s endowment of human capital (such as decent education, vocational training, and health services). 
  • Addressing affordability of basic needs (for example, via provision of affordable housing, price caps on important services, and competition policy). 
  • Support for people who would otherwise struggle in the labour market to access good jobs (perhaps even a job guarantee). 
  • Regulation of financial markets and promotion of financial stability: for example, of how financial institutions behave (reducing high frequency trades, for instance); shifts in corporate governance; and ensuring capital flows to productive activities (rather than subsidising harmful activities and products). 
  • Promotion of fair trade. 
  • Public procurement with social goals in contracts. 

Conclusion  

Predistribution is a critical lever for generating a more balanced distribution of wealth. It’s an upstream mechanism that heads off inequality before it arises by shaping market outcomes to be fairer, rather than depending on government to even things up once inequality has emerged. There are a range of actions governments and other economic players can take to predistribute economic resources. Now it’s time to start talking about it more and putting the changes in place to make the most of its potential to create the economy we could have! 

NB A shorter version of this piece appeared in The Point: https://thepoint.com.au/opinions/260428-redistribution-or-predistribution-another-way-to-think-about-tackling-inequality  

Download our printable/shareable resource about Predistribution.

Predistribution Explainer

Read ‘The economy we could have’: https://nexteconomy.com.au/work/the-economy-we-could-have-new-paper-out-now/

Check out the series: https://nexteconomy.com.au/work/new-series-building-the-economy-we-could-have/

Investing in regions to unlock the transition

Australia is currently navigating a fundamental transformation of its energy system, shifting from a fossil fuel past toward a renewable future. Our regional communities are at the frontline of this change, hosting the infrastructure, resources and workforce that will determine our national success. 

Our In Brief: Investing in regions, unlocking the transition series offers financial decision-makers across government, investment and philanthropy a high-level entry point into regional investment and its role in Australia’s transition to a climate-safe, regenerative and socially just economy. 

The series grew from an investor experience in Gladstone in 2024 and has since expanded – in geography and subject matter – drawing on work across regional Australia, desktop research and expert contributions. 

Each brief provides a bird’s-eye view of a focus area, including key barriers and where support is most needed. Current topics include: 

  • Decarbonising and increasing the capacity of the grid 
  • Developing green export industries 
  • Regional investor insights from Gladstone 

These briefs are a starting point – designed to spark conversation, build shared understanding and support deeper discovery. Because these topics are interconnected, effective progress requires a whole-of-system approach and close coordination across sectors. 

As this space evolves rapidly, we welcome your feedback to keep the series current and useful.

Decarbonising and increasing the capacity of the grid 

Australia’s electricity power system or “grid” is the vast transmission and distribution network that transports electricity from generators to consumers. Right now it is undergoing a fundamental transformation from its fossil fuel origins toward a renewable future.

Download

Regional investor insights from Gladstone 

Industrial regions are central to Australia’s net zero ambitions. They host the resources, infrastructure and workforce that will determine whether the energy transition succeeds. Gladstone, an industrial heartland with exposure to emissions-intensive and trade-exposed industries, is on the frontline of the global energy transition. 

Download

Developing green export industries 

The global shift to net zero emissions is the defining economic and industrial transition for Australia this century. While the value of Australia’s emissions-intensive exports will decline with global demand for fossil fuel, the global energy transition also creates enormous potential for new industrial growth. Early and coordinated investment can position Australia as a leading global supplier of green commodities and advanced manufacturing components. 

Download

The mechanism critical for achieving a just transition

Earlier this year, The Next Economy made a submission on how a Just Transition Mechanism could be operationalised to the United Arab Emirates Just Transition Work Programme at the United Nations Framework Convention on Climate Change.

Here we explain what a Just Transition Mechanism is, why it’s needed and how we think it can be made a reality.

A Just Transition Mechanism and why we need it

The world has entered the implementation phase of the transition to net zero. While countries face different challenges, all are grappling with the multiple technical, social and economic complexities of one of the biggest transformations of the global economy since the Second World War. While national and international bodies can set climate targets, for these to be properly realised, additional support is needed to translate ambition into action in ways that will generate rapid, positive and lasting transition outcomes.

Enter the Just Transition Mechanism, a key initiative proposed under the United Arab Emirates Just Transition Work Programme at the UNFCCC. It’s intended to ensure that it’s someone’s job to guide, support and sustain transition activities to address the climate crisis while protecting and even enhancing the wellbeing of people and the environment.

At The Next Economy, we think this is critical. It is beyond the capacity of individual nations to manage the transition alone. If countries are to have any chance of achieving their climate goals, the focus needs to shift from setting targets to supporting countries in figuring out how to transform their economies to accelerate the transition to net-zero emissions in ways that reduce harm and maximise benefits.

Without this support, not only will the world fail to reduce emissions to the extent needed to tackle the climate crisis, but transition efforts may exacerbate inequality and poverty.

If designed well, the Just Transition Mechanism could facilitate the integration of just transition principles and approaches across different levels of government and global agencies, each responsible for different aspects of the transition. Not only would this help generate broader acceptance of the transition, but it would also increase the confidence of governments and investors in taking meaningful climate action at all levels.

How a Just Transition Mechanism can be operationalised

While bodies already exist both within and outside the UNFCCC to support transition efforts, more needs to be done to build the capacity of those needing support to know what they need and how to manage all elements of the transition to a decarbonised economy in a just and equitable way, and to ensure that those offering expertise and resources incorporate justice principles and a rights-based framework to their programs.

The Just Transition Mechanism can meet this challenge by ensuring that climate mitigation and adaptation efforts are managed in a just and equitable way and improve social, economic and environmental outcomes by:

  • Mapping existing resources, funds, expertise and institutions.
  • Undertaking assessments to ascertain what countries, regions, economic sectors and key actors need to support just transition efforts.
  • Matchmaking to deploy technical and financial assistance in a responsive and appropriate manner.
  • Synthesising, sharing and generating knowledge.
  • Developing measurement, monitoring and reporting frameworks to support accountability.

Turning to the design of the mechanism, the priority areas to be worked out are:

  • Scope, including whether it’s holistic and broad enough to consider justice and equity issues related to mitigation and adaptation efforts across all economic sectors, and able to offer practical and tangible support to integrate just transition considerations into existing plans and programs.
  • Governance structure and work plan, including whether it’s overseen by a committee or advisory board,secretariat, host institutions or a pool of experts.
  • Staffing, including ensuring that it is sufficiently resourced by staff with the expertise to direct resources and effectively liaise with institutions and those requiring support.
  • Funding, including whether a new Just Transition Fund is needed to channel new grant-based and highly concessional finance. 

New series: ‘Building the economy we could have’

‘Building the economy we could have’ – A series of ideas, case studies and concepts exploring how we move to an economy that works for people and planet. 

Australia’s future depends on whether we can move beyond piecemeal reforms to embrace systemic change. 

Last year, we released The Economy We Could Have – a paper that looks under the bonnet of Australia’s economy: rising inequality, the erosion of the ‘fair go’, but also a story of hope. Of momentum growing across the country, and of enterprises and communities already leading the way. 

The response was one of excitement, speaking to a deep desire for transformative economic change rather than the same old, tired recipes. Now, with Australia facing new economic pressures including an oil crisis, the impetus to act is greater.  

Cartoon by Jess Harwood for The Next Economy

So, we are doubling down. The ideas that politicians and decision makers reach for in a crisis matter. We want those ideas to be the ones that put wellbeing at the centre: dignity, purpose, participation, fairness, and nature. As a foundation, rather than an afterthought.  

That’s where our new series comes in. 

Building The Economy We Could Have explores the ideas, case studies and concepts that show how we get there. Right now, there are many isolated or ‘Lego wins’, the examples that show what can be done better, yet scattered and disconnected. We are turning our focus to see these as building blocks: things worth doing more of, and connecting across the country. 

We’ll share examples that show another way is possible and outline the potential of wellbeing economic concepts in practice, with case studies, explainers, interviews, and of course drawing on our work in regional communities looking to build resilient and thriving communities through times of change. ‘ 

The series includes:  

  • Explainers on wellbeing economy concepts and how they are showing up in Australia 
  • Case studies of enterprises, communities and policy makers doing differently 
  • Australian history showing we have charted different approaches before 
  • Interviews with people bringing fresh ideas and approaches. 

We are excited to uplift the work that is steadily charting the way forward, drawing on Australian’s strengths as people who back their neighbours, champion local ideas, and have a long track record of showing the world what policies that work for people and planet can look like.  

This series is a starting point for deeper thinking and conversation. We’d love to hear what resonates, or what we are missing. Contact us here.

Read our first case study:

Earthworker Cooperative Network

Read our explainers:

Predistribution
Lifestyle Drift

What freight decarbonisation means for regional Australia

Land Sector Program Lead Jacqui Bell ponders what freight decarbonisation means for regional Australia off the back of a commercial vehicle decarbonisation summit at Parliament House. 

Our Land Sector Program Lead Jacqui Bell attended Freight Forward summit on commercial vehicle decarbonisation at Parliament House on 30 March 2026, hosted by Energy Futures Foundation. This event could not have been timelier, as we grapple with fuel security as a nation. It’s also deeply relevant to our work with regional communities here at The Next Economy. 

Jacqui heard how Australia imports 90% of our transportation fuel and moves more freight per person than any other country. She also learnt that 98% of businesses in Australia’s freight transport system are owned by small to medium businesses, 2% by owned by large corporate freight and logistics operators. Those big businesses have the power to send signals down the supply chains to make the transition work, but those signals must be backed by investment, education and support to shift. 

Jacqui at Parliament House on Monday 

Here are some more of Jacqui’s reflections post-summit about what she heard and what this might mean for our work with regional communities. 

I’m really curious about the “lopsided economics of transport” (to quote Transport Workers Union National Secretary Michael Kaine). While large logistics companies move a significant share of Australia’s freight through linehaul networks, the system relies heavily on small and medium operators (think local businesses and independent drivers) to complete last-mile delivery and provide regional coverage from depot to door/gate. They make up around 98% of freight businesses in Australia and are critical to how the freight system actually functions.  These businesses are embedded within large supply chains, not separate from them. Additionally in many regions there are more unlikely suspects that will be affected by the sector transition – think the farmer who owns machinery and trucks or the locally owned and managed service station which plays a role similar but different to the local pub.  

Australia’s freight and logistics system in Australia is important for regional Australia and communities. Australia’s freight system in many cases keep regional economies moving, and are critical to the viability of local industries and businesses and local spend. Changes in this sector aren’t going to just impact the trucks we see on the road or how and where they charge to ‘refuel’, sectoral change in technology, ownership, power and system design have the potential to create a ripple effect or more likely a tsunami of impacts for other regional communities, local businesses and industries, regional economies and serviceability across more rural and remote parts of Australia.  Not to mention have significant implications for other sectors in transition such as energy. 

There are practical challenges for freight decarbonisation in regional Australia. Much of our local infrastructure, like roads and bridges, are no longer fit-for purpose for the future transport and freight system we need to transition well. There’s also questions about energy access including poles and wire infrastructure, which is not reliable or extensive enough to provide energy where it is going to be needed. There’s the fragmentation of the industry between technologies, ownership, scale and size. And that’s not to mention the practicalities of dealing with digitisation of machinery, and their serviceability etc. We hear of farmers who are stockpiling trucks and machinery because malfunctioning digital systems in machines are too disruptive for day-to-day operations. 

While there are challenges, there are also opportunities. Regions like Hay in NSW could be partners for investment; they have space for microgrids, potential for their own energy production (e.g., wind turbines) and the region is already strategically located on major trucking routes. How do we support a region like Hay to establish its own charging and servicing infrastructure and move away from providers just ‘coming in over’, doing their own thing and taking spend out of the local economy? 

We need regional voices. They need to be in the room and around the table of these conversations to make sure that workers, and small to medium business owners and regional agencies are part of the process and involved in shaping the solutions.  

This conversation goes beyond reducing emissions. Freight is one of the biggest vulnerabilities to our nation’s economy, and its decarbonisation is also about building resilience. 

The transition of the sector is probably going to require a mix of technologies. It’s not just electrification of vehicles, but there may also be discrete roles for green hydrogen and biofuels in some cases (although the jury seems still a bit out on this). It is a question of the right mix – the right trucks for the right segments. 

Ultimately, this is not a technical challenge; this is a socioecological challenge.  The technology is here for decarbonisation of freight and many commercial vehicles are due to be changed over. This is an implementation challenge. Some stats suggest we are in a ‘window of opportunity’ where a large number of vehicles are due to be upgraded in the next 5 years; the push is to shift from diesel to EV now. While there is a high upfront capital price, ongoing fuel prices make the shift favourable. Panels from Woolworths, Fortescue, and IKEA, for instance, noted that the business case (for transition) stacked up even with pre-crisis prices. But how do we support this to happen? There was a lot of talk about misinformation, knowledge, and understanding. 

There’s a big question around the overall design of the system. Air Vice-Marshal John Blackburn, former Deputy Chief of the Air Force, current Chair, Institute for Integrated Economic Research Australia made this point, noting we appear to be arguing the components. There was also much discussion about charging infrastructure, the need for it, how to roll it out and who owns and accesses it. What will this mean for the majority of small to medium businesses that need to use that infrastructure? 

My final take home is that there is different work that needs to be done in this moment. We need to navigate through this crisis, making sure that we don’t lock ourselves into something we can’t easily undo.  And then we need to get realistic about a ‘funded’ transition that is fair, sustainable, keeps people safe, keeps the industry viable, and supports regional communities and economies. 

Questions I’m still thinking about: 

  • What happens to small ‘Ma and Pa’ independent fuel stations who play such an important role in regional communities? 
  • How do we take care of society of our people and places as we transition so we continue to be a place that we want to live, where prosperity is shared? 
  • How are people in the sector thinking about these social elements of this challenge and transition?  
  • How can regions whose economies rely a large part on freight and logistics to keep their economy going, be a part of this conversation about enabling infrastructure and system redesign? 
  • If transport comes to a standstill and/or if it shifts into a totally different system that locks out local businesses and operators, how do we prepare communities and build the socioeconomic conditions and capacity required to endure and adapt? 
  • If most freight and logistics companies are run and owned by small to medium business owners around Australia, how do we support that system to move in a way that doesn’t involve carrying the cost burden of change without having a share in the rewards of moving? 

Making sense of the ISP 

The ISP runs to hundreds of pages and helps guide energy decisions across the country, yet few people read it. We chatted with climate and energy specialist Franzika Curran to break down its importance. 

The Australian Energy Market Operator’s Integrated System Plan, usually shortened to the “ISP”, is not the kind of document most people would pick up for a casual read. It is a large technical report full of modelling, forecasts and system planning – and it quietly shapes decisions that play out across the country. 

To help unpack what it is and why it matters, we caught up with climate and energy specialist Franziska Curran, who helped contribute to our recent ISP submission and who has spent time sifting through the hundreds of pages of the draft plan. 

Franziska, for people who have never heard of it – what is the Integrated System Plan? 

At its core, the ISP is a very large piece of analysis that asks a fairly simple question: what is the lowest cost way for Australia to meet its future energy needs while also meeting government policy goals? 

To answer that question, the Australian Energy Market Operator draws on years of data, modelling and consultation. It considers how demand might change, what kinds of energy generation are likely to be built, how much transmission will be needed, and how all of that fits together as coal power stations retire and new energy sources come online. 

The result is a long-term plan that outlines what the electricity system could look like over the next two decades, and what infrastructure would likely be needed to support it. 

It does not directly approve or build projects. Instead, it acts more like a map. It shows the pathway that planners, investors and governments are expected to follow when making decisions about new infrastructure. 

If it is a technical planning document, how does it shape what happens in real places? 

A successful energy transition requires a significant amount of new infrastructure. That includes new generation such as wind and solar, as well as the transmission lines that move electricity across the system. 

AEMO has a responsibility to plan for the transmission network needed to support that system and the ISP helps fulfil that role. 

By setting out the direction the system is expected to take, the plan sends signals to investors, network companies and planners about where new infrastructure will likely be required. Those signals then flow through into more detailed planning and investment decisions. 

Over time, those decisions shape what gets built and where. 

What changes when a project is labelled “actionable”? 

Within the ISP, some transmission projects are labelled as “actionable”. 

That label matters as transmission projects cannot progress through the regulatory approvals process unless they are identified as actionable within the plan. In that sense, the ISP acts as a gatekeeper. 

Once a project receives that designation, the project proponent can move into the next stages of regulatory approval and planning. Future versions of the ISP then continue to check that those projects still align with what the electricity system needs. 

Why do regional areas tend to host so much of this infrastructure? 

Much of the renewable energy Australia needs will be built in regional areas, and this is for a number of reasons.  

One reason is the quality of renewable resources. Wind and solar generation tends to be strongest in specific geographic areas. Building projects in places with strong resources allows the system to generate more energy more efficiently. 

Another factor is scale. Large renewable energy projects require significant land and are often built in clusters that make the most of existing or planned transmission infrastructure. 

Concentrating development in areas with strong renewable resources and suitable space can make better use of the network that connects them. If large projects were spread thinly across the entire country, significantly more transmission infrastructure would be needed to connect them all. 

What tends to determine whether this development benefits a community? 

For me, one of the most important factors is supporting local leadership. 

Where communities are actively planning for the future they want and organising around that vision, they are often better placed to shape the opportunities that come with new infrastructure. 

That kind of leadership can help ensure projects align with local development goals and that benefits are captured locally. 

That is also why I think the work of The Next Economy is so important. Taking the time to understand what communities want – and do not want – in  their future, making sure people have access to clear information about what is coming and how decisions are made, and helping communities articulate their priorities. This is so important in ensuring development supports local aspirations rather than working against them. 

What is often misunderstood about the ISP? 

For many people, the ISP can feel quite distant or abstract. It is a large technical document, and it can be easy to dismiss it or criticise it without looking closely at what sits behind it. 

But the plan represents years of analysis, modelling and consultation. It attempts to map out a pathway for a very complex transition, bringing together data about energy demand, infrastructure, technology and policy. 

It may not always make for easy reading, but it is a significant piece of work that plays an important role in shaping how the electricity system evolves over time. 

The final AEMO ISP 2026 is expected to be released in June this year.